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Ryan v. New Jersey Racing Commission

January 12, 2001


On appeal from the Superior Court of New Jersey, Law Division, Bergen County, DC-13809-98.

Before Judges Pressler, Kestin, and Alley.

The opinion of the court was delivered by: Alley, J.A.D.


Submitted December 12, 2000

Defendant, the New Jersey Racing Commission, appeals from a judgment for $3,995.20 and court costs in favor of plaintiff, Martin Ryan, entered after a trial in Special Civil Part on plaintiff's claim for payment on an allegedly stolen winning superfecta parimutuel racing ticket he purchased at the Meadowlands Racetrack. We reverse.

Plaintiff contended that on March 4, 1998, he purchased several winning tickets for a horse race at the Meadowlands Racetrack, among which was the "stolen" ticket that is the subject of his claim. He alleges that he bought this ticket at the same time as his other tickets. He testified that after the race was completed, unaware that the ticket in question was a winning superfecta ticket, he handed the ticket to a stranger, who walked away with it without any protest by plaintiff. The trial judge accepted plaintiff's testimony and entered judgment accordingly.

The Racing Commission asserts on appeal that the trial court's judgment is contrary to the applicable regulations, which it contends preclude payment on racing bets except on presentation of the ticket. It contends further that the ticket was never cashed, that it expired six months after it was issued, and that the expired ticket could not be paid even if it had remained in plaintiff's possession and he had attempted to surrender it in exchange for payment. It also contends that the trial court lacked jurisdiction because plaintiff's recourse was to appeal from the Racing Commission to the Appellate Division, rather than to begin an action in the Law Division, Special Civil Part.

We reverse because the trial judge erred in determining first that physical surrender of a racing ticket is not a prerequisite to obtaining payment of the ticket, and second that a ticket can be paid after its six month expiration date.

To protect the public from the dangers inherent in all forms of gambling, the Legislature vested the Racing Commission with powers necessary to enable it to carry out the Racing Act of 1940, N.J.S.A. 5:5-22. Horsemen's Benev. and Protective Ass'n, New Jersey Div. v. Atlantic City Racing Ass'n, 98 N.J. 445, 452 (1985) (regulation of horse racing is within the authority of the Legislature to protect the health, safety, and general welfare of the people). The Racing Commission's powers include the authority to prescribe rules, regulations and conditions under which horse racing is to be conducted in this State. N.J.S.A. 5:5-30. Pursuant to this broad authority, the Racing Commission promulgated N.J.A.C. 13:70-29.13, which reads in material part:

N.J.A.C. 13:70-29.13 Ticket claims...

(b) No claim shall be considered thereafter and no claim shall be considered for tickets thrown away, lost, changed, destroyed or mutilated beyond identification.

(c) Payment of wagers will be made only on presentation of appropriate pari-mutuel tickets.

The parties have not cited, nor has our own research disclosed, any case in this jurisdiction that deals directly with a denial of payment to a race track patron who cannot produce the winning ticket. At least one court, however, has upheld such a denial as to another form of legalized gambling.

In Karafa v. New Jersey State Lottery, 129 N.J. Super. 499 (Ch. Div. 1974), the Lottery Commission refused to pay a claim to a person who alleged that he had purchased a winning lottery ticket. There, six or seven people observed plaintiff with the winning ticket, which was worth $50,000. The plaintiff gave the ticket to his mother for safekeeping. The plaintiff's mother inadvertently discarded the winning ticket with a batch of old, worthless tickets. The director of New Jersey's lottery rejected plaintiff's claim because he could not produce the ticket. In upholding the Lottery Commission's refusal to pay on the ticket, the court relied upon N.J.S.A. 5:9-7(a)(5), a statute containing language nearly identical to N.J.A.C. 13:70-29.13(c). The statute authorized the Lottery Commission to promulgate regulations dictating the conditions for the payment of prizes "to the holders of winning tickets[.]" The court found that this statutory language indicated a legislative intent to restrict payment to persons who physically possessed the ticket and that the Lottery Commission's promulgation of a regulation mandating possession was consistent with this intent. Karafa, supra, 129 N.J. Super. at 502-03. The court explained that the clear legislative purpose was to keep the administrative machinery geared for the payment ...

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